Gemfields takes $125M hit as Montepuez grades disappoint
The writedown puts pressure on Gemfields to sustain improving ruby recoveries at its key Mozambique mine.
Gemfields, a colored gemstones miner, reported a significant $125 million impairment hit related to its Montepuez ruby mine in Mozambique, resulting in a $73.5 million loss for the six months ending June. The company had previously adjusted the impairment from $35 million to $65 million for the 2025 financial year due to lower-than-expected high-quality ruby recoveries.
Gemfields' interim CEO, David Lovett, attributed the disappointing production to lower-than-expected rubies during the first half of 2026, with early signs of improvement. The company is trying to address the issue by optimizing mine planning, operating reliability, and processing capacity at its PP2 processing plant at Montepuez, which is designed to triple the mine's capacity to 600 tonnes per hour.
Montepuez generated $76.1 million in revenue during the first half, while its Kagem emerald mine in Zambia produced $26.7 million. Gemfields has been implementing cost-cutting measures, including a 17% reduction in group operating costs, a $30 million rights offer, and selling luxury jewellery brand Fabergé for $50 million to improve its financial position.
The company faces challenges in the gemstone market, such as rising geopolitical tensions in the Middle East creating fuel cost concerns and potential supply disruptions for its diesel-dependent operations.
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